Are you licensed in another state? Reminder: All Brokers Must Complete North Carolina approved CE

On July 1, 2023, the North Carolina Real Estate Commission repealed Rule 58A .1711 which exempted brokers licensed in another state from continuing education requirements in North Carolina.

Therefore, pursuant to Rule 58A .1702, all North Carolina brokers must complete eight credit hours of real estate continuing education each license year. The eight hours consist of:

• four credit hours of elective courses; and
• four credit hours of either the General Update Course or the Broker-in-Charge Update Course.

All brokers without BIC-Eligible status and provisional brokers must attend the four-hour General Update Course (GENUP) and all Brokers-in Charge and BIC Eligible Brokers must attend the Broker-in-Charge Update Course (BICUP). In addition, brokers must take an additional four-hour approved elective course. Brokers are required to complete eight credit hours of continuing education by June 10^th at 11:59 PM EST to remain eligible for active license status. This requirement begins upon the second renewal following initial licensure and upon each subsequent annual renewal.

NOTE: Out of state brokers MUST take the appropriate NC Update Course and a North Carolina elective course to renew their North Carolina real estate license on active status. These courses are available online as well as in person.

Fair Housing Symposium

Last month, the North Carolina Real Estate Commission kicked off Fair Housing Month by hosting a  collaborative Fair Housing Symposium in Durham at the Durham Regional Association of REALTORS®.  The sold-out Symposium featured presenters from the City of Durham Human Relations Division, the United States Attorney’s Office, Legal Aid of North Carolina Fair Housing Project, and the North Carolina Real Estate Commission. Attendees were able to gain valuable knowledge on the more nuanced components of fair housing laws, such as domestic violence, source of income discrimination, reasonable accommodations, and the criminal and civil implications of violating fair housing laws.

Hearing about real cases from those responsible for investigating and prosecuting fair housing violations helped attendees understand the real-life impact of fair housing. Missed the April Fair Housing Symposium? No worries, there are two additional opportunities to attend so don’t miss out. Register on the Commission’s website today, https://www.ncrec.gov/FairHousing/Registration.

Residential Square Footage Guidelines

Since 1999, the North Carolina Real Estate Commission has produced and distributed the Residential Square Footage Guidelines (“Guidelines”).  The Guidelines booklet can be found on the Commission website under Publications and then Guides.

The Guidelines booklet explains how to measure residential properties, the definition of living area, and provides numerous examples of various types of residential buildings.  Brokers should follow the Guidelines any time they are measuring residential property.  Alternatively, brokers can instead use the standards from the American National Standards Institute (“ANSI”). Brokers-in-charge should use the Guidelines as a training tool for their brokers.

Brokers are not required by the Real Estate License Law or Real Estate Commission rules to report the square footage of properties offered for sale or rent.  However, when brokers do report square footage, including in a multiple listing service, it is essential that it is accurate. There have been many disciplinary actions against brokers who failed to accurately report heated living area, which constitutes a misrepresentation under N.C.G.S. § 93A-6(a)(1).

What Counts

Living area (sometimes referred to as “heated living area” or “heated square footage”) is space that is intended for human occupancy and is:

• Heated by a conventional heating system or systems (forced air, radiant, solar, etc.) that are permanently installed in the dwelling — not a fireplace or portable heater — which generates heat sufficient to make the space suitable for year-round occupancy

• Finished, with walls, floors, and ceilings of materials generally accepted for interior construction (e.g., painted drywall/sheet rock or paneled walls, carpeted or hardwood flooring, etc.) and with a ceiling height of at least seven feet, except under beams, ducts, etc. where the height must be at least six feet four inches [Note: In rooms with sloped ceilings (e.g., finished attics, bonus rooms, etc.) you may also include as living area the portion of the room with a ceiling height of at least five feet if at least one-half of the finished area of the room has a ceiling height of at least seven feet.]

• Directly accessible from other living area (through a door or by a heated hallway or stairway)

What Doesn’t Count

• Areas that are not heated by a permanent heat source (fireplace does not count)
• Unpermitted areas – The square footage of unpermitted additions or improvements must be separately identified when making representations concerning square footage, and brokers must inform prospective buyers that there is no permit for the addition
• Rooms with a ceiling height under seven feet with two exceptions for areas under beams or ducts and areas with a sloped ceiling (see above for details)
• Rooms that are not accessible from other living area, as defined above
• Bay windows that do not reach the floor or are less than seven feet tall
• Chimney base if external to the building (chimney hearth does count)
• Mechanical rooms that are not located within the living area
• Decks, balconies, porches, garages and carports

Newly licensed brokers are taught how to measure a building using the Guidelines booklet in Postlicensing 301.  For those who need a refresher, there are several continuing education elective courses about measuring square footage.  Brokers can search for these courses on the Commission website.

Quick Tips

“You must renew your real estate license online via the Commission’s website from May 15-June 30^th.”

-A. Anderson, License Specialist

“Your renewal fee must be submitted online. The Commission does not accept checks.”

-A. Burn, License Specialist

“You can renew your license prior to completing your CE requirements.”

K. Crawford Heath, Assistant Director of Education & Licensing

“”Course completion certificates are for your personal records. It is the education provider’s responsibility to report your course completion to the Commission within 7 days. Please reach out to the provider if the credit has not posted to your record within 10 days.”

-A. Cox, Education Officer

“Please refer to your license number when emailing/calling the Commission with questions.  “

-B. Hollings, License Services Officer

Tech Corner: The Importance of Email Security

In today’s digital world, email has become one of the most common ways to communicate. While convenient, it also exposes sensitive information to potential threats like hacking, phishing, and data breaches. In this guide, we’ll explore the importance of email security and provide steps to help brokers protect sensitive information.

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Why Email Security Matters in Real Estate Transactions

1. Sensitive Data: Real estate transactions involve highly sensitive information such as Social Security numbers, financial records, personal identification details, and bank account numbers. A breach of this data can lead to identity theft, financial loss, and legal complications.
2. Confidential Communication: Email exchanges between brokers and clients often include private conversations about offers, counteroffers, inspections, and contractual terms. Ensuring that these communications are secure is vital to maintaining confidentiality.
3. Reputation Protection: A breach in email security can significantly damage your reputation as a trusted broker.

How to Secure Your Emails and Protect Clients’ Personal Information

1. Use Strong, Unique Passwords for Your Email Accounts

• Why: Weak passwords are one of the easiest ways hackers gain access to email accounts.
• How-to: Choose strong, complex passwords with a combination of upper and lowercase letters, numbers, and special characters. Avoid using easily guessed words like your name or “password123.” Use a password manager to securely store and generate strong passwords.

2. Enable Two-Factor Authentication (2FA)

• Why: Two-factor authentication adds an extra layer of security, making it more difficult for unauthorized individuals to access your account.
• How-to: Most email providers, like Gmail and Outlook, allow you to enable 2FA. This requires you to verify your identity using a second method, such as a code sent to your phone, whenever you log in.

3. Encrypt Your Emails

• Why: Email encryption ensures that only the intended recipient can read your messages, protecting sensitive information from being intercepted during transmission.
• How-to: Most email services like Gmail, Outlook, and Apple Mail support end-to-end encryption, but you may need to enable it in your settings. You can also use third-party tools which offer built-in encryption.

4. Use Secure File Sharing Services

• Why: Sending attachments like contracts, financial statements, and other documents via email can be risky, as they may be intercepted.
• How-to: Instead of sending sensitive documents as email attachments, use secure file-sharing services like Dropbox, Google Drive, or OneDrive with password protection. You can share a link to the document, ensuring that it’s only accessible to authorized individuals.

5. Be Cautious with Public Wi-Fi

• Why: Public Wi-Fi networks are often not secure, which can expose your email communications to hackers.
• How-to: When accessing your email on public Wi-Fi, use a Virtual Private Network (VPN) to encrypt your internet connection and prevent unauthorized access.

6. Beware of Phishing Emails

• Why: Phishing attacks are common in real estate, where cybercriminals pose as legitimate parties to steal personal information.
• How-to: Always verify the sender’s email address and be cautious of any unsolicited emails. Look for red flags such as poor grammar, suspicious links, or urgent requests for personal information. If in doubt, contact the sender directly through trusted channels to confirm the email’s legitimacy.

7. Educate Your Team and Clients

• Why: Everyone involved in a real estate transaction plays a role in keeping email communications secure.
• How-to: Educate your team and clients about best practices for email security, such as avoiding suspicious links and not sharing sensitive information over email unless necessary. Consider sending out a secure communication guide to your clients to help them recognize the importance of security in their transactions.

8. Regularly Update Your Email Software

• Why: Email service providers constantly update their software to patch vulnerabilities and improve security.
• How-to: Enable automatic updates for your email client to ensure that you always have the latest security features and patches.

9. Consider Using a Secure Email Provider

• Why: If you handle a significant volume of sensitive real estate data, it might be worth investing in an email service specifically designed for secure communication.

By taking proactive measures, such as using strong passwords, and encrypting emails you can significantly reduce the risk of a data breach and protect your clients’ personal information. Remember, email security is an ongoing process. Stay vigilant and update your practices as technology evolves to ensure that you are always providing the highest level of protection for your clients.

Question Corner: NCREC’s Most Frequently Asked Questions

Question: Can I renew my license before May 15?

Answer: No. By law, the annual renewal period for your real estate license begins at midnight on May 15 and ends at 11:59 PM on June 30. Therefore, brokers cannot renew their licenses any earlier. If a broker fails to renew their license during May 15th-June 30^th, their license will expire.

Brokers must pay a $90 fee between July 1 and December 31 to reinstate an expired license. If you are a broker and fail to reinstate by December 31, after that, you will need to submit a new application, along with the application fee and a criminal background report. Additionally, you may be required to complete extra education or pass the state licensing exam. For more details, visit the Commission’s license reinstatement page.

Question: Do I have to renew my firm license?

Answer: As the Qualifying Broker (QB) for your firm, it’s crucial to renew the firm’s real estate broker license annually between May 15^th-June 30th. According to Commission Rule 58A .0502(g)(2), the QB is responsible for this renewal.

Failure to renew the firm’s license by the deadline results in significant administrative changes:

• Brokers Associated with the Firm (not on provisional status): Their records will be updated to reflect their home addresses, effectively removing their association with the firm.
• Provisional Brokers: They will be placed on inactive status, restricting their ability to engage in brokerage activities.

These changes can disrupt your firm’s operations and the professional activities of your affiliated brokers. To avoid these complications, please ensure timely renewal of the firm’s license each year.

Case Study: Material Facts

FACTS:  During a listing appointment, the prospective seller states that they recently had a home inspection that indicated water leakage in the basement walls and crawl space. They have ordered no further inspections to determine the extent of the issue or identify repair options. The broker tours the property and sees no moisture or standing water at that time. The broker lists the property but does not mention the water leak to any prospective buyers. The seller selects “No Representation” on the Residential Property and Owners’ Association Disclosure Statement (RPOADS).

ISSUE:  Did the broker fulfill their duties under License Law and Commission Rules?

ANALYSIS:  No. Under N.C.G.S. § 93A-6(a)(1) and Commission Rule 58A .0114, a broker must make reasonable efforts to discover and disclose material facts to parties to the transaction, regardless of who they represent.

A material fact is any fact that could affect a reasonable person’s decision to buy, sell, or lease real property.  A broker has an affirmative duty to take reasonable steps to discover and disclose material facts to all parties in a transaction. Failure to disclose material facts continues to be the most common complaint from consumers. 

This mandatory disclosure of material facts includes disclosure of:

• Facts about the property that the broker knows exist,
• Facts about the property they reasonably should know exist, and
• Information that is considered common knowledge.

Although the broker/agent did not personally observe any moisture or standing water, they were informed of it by the seller and therefore had an obligation to disclose what they knew about the water leakage in the basement walls and crawl space. The seller’s completion of the RPOADS does not relieve the broker of their obligation.

As a result of the broker’s failure to adhere to N.C.G.S. § 93A-6(a)(1) and Commission Rule 58A .0114, the broker may be subject to disciplinary action by the Commission. 

RESOURCES: N.C.G.S. § 93A-6(a)(1), N.C.G.S. § 93A-6(a)(10), and N.C.G.S. § 93A-6(a)(15) License Law and Commission Rule:  58A .0114Articles: “What is a Material Fact” and “How to Discover Material Facts”    

Education Provider Certification Renewal Process: Step-by-Step

Just as qualifying brokers are required to renew their firm licenses, education directors are required to renew their education provider’s certification. Education directors should follow these steps to ensure the successful renewal of their provider’s certification without any interruption to their education program:

1. Starting on May 15^th, education directors will first need to complete the Education Director Course as part of the annual education requirement to renew their provider’s certification.
2. Next, they will want to review their Policies & Procedures Disclosure (PPD) to ensure the information contained in it is up-to-date and still accurately reflects the types of education they offer.
3. With these two steps completed, the education director can now login to the EP Dashboard to renew their provider’s certification and attach their updated PPD to the renewal form.
4. After the renewal form has been submitted, the next step is to renew any additional branch locations, if applicable.
5. Next, they will need to go through and renew each education type their provider offers whether it is Prelicensing, Postlicensing, and/or Continuing Education. In addition to renewing the type of education offered, they will also need to renew each delivery method of each course they are approved to offer within that education type if they still want to offer it in the coming license year.
6. Finally, once everything they intend to renew has been selected, they will need to pay all required fees.

The biggest difference for the education provider renewal process from other renewals is the lack of a reinstatement period. Failing to renew an education provider’s certification will result in the expiration of that certification, approved locations, and all course approvals. Since there is no reinstatement period, an education director will be required to start over with a new education provider application and then submit course applications for all of its course approvals to get up and running again.

If a director has any questions regarding the requirements to renew their education provider’s certification (and everything else contained within it), they should review the “EP Renewals” video located in the Video Library of the EP Dashboard. If they still have additional questions, they can reach out to Education staff at educ@ncrec.gov.

Reminder: Retain Text Messages

Most brokers are aware that Commission Rule 58A .0108 requires that all transactional records be retained for three years. Most brokers are good at retaining contracts, agreements, money trails, closing statements, and such. But what about those pesky text messages that are frequently used to communicate orders, approvals, and questions by clients or other transactional parties? Where and how are they kept? Are they available to be provided to Commission representatives without prior notice as required by rule?

If your heart just skipped a beat in panic, you are not alone. It is not uncommon for brokers under investigation to be unable to provide pivotal documentation because it was by text message that is no longer available to the broker.

How can that be, you ask. It usually revolves around the broker assuming that their phone/text service provider keeps all text messages indefinitely. Sadly, this is seldom the case. It seems that most carriers scrub/delete call records and/or text messages in a fairly short timeframe unless the phone owner has changed the retention settings to a longer period of time; some carriers offer “forever” as an option. Retaining such data in the Cloud is also a good storage option.

Moral of the article: don’t assume that you will be able to retrieve a needed text unless you have made specific retention choices with your device and/or service provider.

Reminder: Continuing Education Points to Consider

Don’t forget to complete your Continuing Education (CE) courses before June 10, 2025, at 11:59 PM EST. Here’s what you need to know:

Broker-in-Charge responsibility: Ensure all affiliated brokers have completed their required CE.

Some CE classes may sell out: Seats are limited, so secure your spot early.

Less than 40 days left: Time is ticking! Act now to fulfill your CE requirements.

Avoid the last-minute rush: Start now to avoid any last-minute stress.

Did you know?

• 80,990 active brokers still need at least one CE course
• 33,736 – Need Both UPDATE & Elective
• 46, 501 – Need just Update
• 39,232 – Need just an Elective
• 29,013 brokers have Completed all CE Requirements